FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.

Econintersect: The easing race continues as the Bank of Japan (BoJ) just announced further quantitative easing (QE). The BoJ increased its asset-purchase program to 80 trillion yen from 70 trillion yen. The monetary easing move amounted to an increase $127 billion at the current exchange rate of 79 Yen to the dollar. The move came as a surprise to many, although there had been a few calls for this sort of move from a very few observers in recent days.

Follow up:

The increased easing was likely prompted by the recent slashing of the second quarter GDP estimate for Japan from 1.4% of 0.7% (annual rates), reported by GEI News.

From an article by APF on Google News:

In its statement Wednesday the BoJ warned "the pick-up in economic activity has come to a pause" in Japan due to the slowing overseas economies.

"There remains a high degree of uncertainty about the global economy, including the prospects for the European debt problem, the momentum toward recovery for the US economy," it said.

"Attention should be given to developments" in global financial markets amid long-lagging European debt problems, it said.

Japan has been a "gentle practitioner" of quantitative easing compared to the U.S. The BOJ’s balance sheet has expanded 42 percent since September 2008 when Lehman Brothers collapsed. The Fed’s total assets have tripled during that period with $2.35 trillion in purchases .

The BOJ has bought assets worth about $1.42 trillion since November 2008 through its purchases of government debt and the asset-purchase program. Both the Fed and the BoJ currently have balance sheets in excess of $3 trillion. With the announcement of QE3 it appears the Fed will easily win the race to $4 trillion.

No feedback yet

Econintersect News Blog

The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.

Keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet